Photo Credit: TINWOT Organic Farms Vegetable business can be very interesting business sometimes with mouth-watering returns but the tr...
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| Photo Credit: TINWOT Organic Farms |
Vegetable business can be very interesting business sometimes with mouth-watering returns but the truth remains; not everyone who attempts to do the business of vegetable production will be successful as it is with every business. The problems and the opportunities associated with doing the business must be carefully studied, analyzed and considered. Vegetable production is just one of the elements of the business itself. Asides having proven production techniques and good yield, you need to be able to sell at good price before a good return on your investment can be guaranteed. A sound marketing strategy therefore is of utmost importance to successful business.
Developing an effective marketing strategy takes time, experience and inputs of more experienced farmers as you are about to read in this article. Similar to other businesses, crop farmers are at the mercy of both biotic and abiotic factors beyond their control and this sometime tilt the outcome from within their reach. Reducing risk and managing uncertainty are pivotal to the success of farming business and one of the ways of actualizing that is by developing a good marketing strategy similar to what large corporations do. The procedures required to develop good marketing strategies shall be shared in this article and detail analysis shall be given. Please note that most of the examples used are mostly characterized by the writer’s geographical location but the same principles apply globally.
Steps involve in forming marketing strategies can be categorized into four: None of these steps stand in isolation but are inter-related. For example, deciding on what to produce depends on when and the target market and by extension the packaging structure to employ.
- Decide on target market
- Produce decision and timing
- Price intelligence
- Understand and use of human psychology: Psychology of First impression
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DECIDE ON TARGET MARKET
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| Central major market |
Decision on the choice of market is not just hinge on the market offering the highest price possible but that which fit the circumstances of farmers. Have you every drive along the interior country sides where you see pocket of local farmers putting just one sack bag of harvest by the road side waiting for tricycle or vehicle to convey them home? Can such farmers be targeting urban markets in Lagos for example which are over 1000 km away just because they offer higher prices?
Deciding on the target market is mostly volume dependent. In general, the larger the volume of produce produced, the greater the number of marketing alternatives. Small farmers are limited to local markets while larger farmers can explore the opportunities in regional markets. This principle is exactly what aggregators or vegetable merchants do; they visit on farmers’ market day where every small farmer brings their produce, they buy appreciable quantity and transport such to regional urban markets where it would be sold at higher margin.
For every marketing alternative available, you must realize that there are pro and con to it. The following summarized the likely alternatives available to farmers.
Farm gate sales: One of the most popular methods of sales of farm produce especially with locals is
selling at the farm. It has the advantage in that it limits the risk of selling at uncertain price at the market notorious with vegetables after spending so much on transporting the produce. Transportation of produce using commercial service can often take as much as 20% to 50% of total sales of produce in many occasions. Selling at the farm gate also eliminate the cost of payment for dealership (popularly called “laada” in West Africa). The farmers can also safe themselves of the cost of harvesting depending on the negotiation had with the buyers.
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| Leafy veggies farmer selling 'ewedu' at farm gate to market women |
However, it also has its shortcoming. The farmer may be short changed by unscrupulous buyers if the former does not do his/her price intelligence beforehand. Moreover, the farmers may lose the benefit of selling at skyrocketed prices which is often the characteristics of general veggies markets though this may also work for the farmers when price falls drastically. The important factor for determining the success of farm gate sales is sometime location inclined and contacting many potential buyers ahead of time not when the produce is ready on the farm so as to choose highest bidder.
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Direct market: A direct marketing sale is that which gives the farmer direct contact with the end consumers. It has the advantage in that the farmer sells at retail price which gives higher margin but it is more costly to set up and managed and it can only be employed by small growers or those who use succession/staggered planting calendar. There are number of options available with direct marketing methods: Road side shelf, retail shop, door to door, CSA but quantity must be considered etc.
1. Road side shelf: the grower in this can case can decide to display the produce at road sides with heavy traffic whereas the passer stop by to buy the produce. You must have noticed a lot of this along popular and local inter-state roads when travelling. It is more of gambling since potential buyers only drive-by by chance.
2. Door-to-Door marketing: This is also a good method of selling your produce to end consumers but in this case a good packaging structure must be used and a need for aggregation and constant communication with potential customers before the produce is ready is key to its success. Major challenge might stem out from how you can ensure continuity. It is either you use succession planting calendar and or aggregate from other growers for you to be able to supply continuously. Please note that this is mostly suitable for small growers e.g. gardens.
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3. Community Support Agriculture CSA: This method is uncommon in this part of the world. It involves the farmers supplying the consumers a list of items of crops on weekly basis. It sometimes involves the customers paying ahead on quarterly or annual basis. The challenge might be around how to ensure continuity when there is crop failure notorious with crop farming. The grower also would be able to plan ahead of time knowing fully well the selling price per unit even before production; a situation NOT possible with open markets.
4. Retail Store: The grower may also decide to operate a fresh vegetable retail store in unbar center where produce are directly sold to consumers. In this case, going by my experience in this business, it is essential that the grower also aggregate from other growers in order to ensure continuous supply at the store. Please note that customers would not be attracted to scarcity of produce or fluctuation in availability of produce. Consumers also like the idea of one-stop shop, since grower can’t possibly grow every crop; it is essential that the grower aggregate from other farms and also do shopping from central market in order to ensure that almost all the notable crop produce are always available at the store at reasonable quantity. Maintaining quality produce at reasonable prices also matters a lot to attract sales.
Other likely major alternatives asides Farm gate sales, Direct market already explained are Local or State Farmers’ market, Central Daily veggies markets, commercial groceries retail stores and Farmers’ cooperative. This would be dealt with deeply in Part 2 of this article (Click Part 2 to read it now). I trust you have picked one of two ideas to run with this year as you plan starting and or expanding your vegetable production and marketing business. I already wish you the best. Please reach out to me in case of any question, concern and even critic.
Please click to also read on the number of services we provide particularly if you are interested in developing proven staggered or succession planting template for continuous production supply for your farm. You can also reach out to me if you are in need of complete crop farm record template. Please do well to subscribe to this blog to get new articles and also like us on Facebook/Follow us on IG.
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